IRS Plans Faster Tax Disclosures and Lower Penalties in Crypto Cases
The US Internal Revenue Service is reportedly preparing changes to its voluntary disclosure program that could make resolving certain tax violations less costly and more efficient—including cases involving cryptocurrency.
According to recent reporting, the proposed overhaul includes several key points:
Lower penalties: The IRS is reportedly considering substantially reduced penalties, although exact amounts have not yet been announced.
120-day target: The agency aims to resolve eligible cases within 120 days after taxpayers complete the required submission process.
One disclosure framework: Crypto-related cases would be handled under the same general program as other tax matters, rather than through a separate IRS process.
Flexible payment options: Installment plans and offers in compromise are also reportedly under consideration.
A separate crypto tax proposal is also advancing.
Section 502 of the proposed Digital Asset Tax Certainty Act would establish a dedicated disclosure pathway for eligible crypto taxpayers seeking to correct past reporting violations. The bill cleared the House Ways and Means Committee in September, but it has not yet become law.
What does this mean for crypto users?
The proposed changes could reduce uncertainty for eligible taxpayers looking to address past compliance issues. However, the IRS's existing voluntary disclosure program is primarily intended for cases involving potential criminal exposure from willful noncompliance—not every accidental reporting mistake.
For now, the details remain subject to change. Taxpayers should wait for official guidance and seek qualified tax advice before deciding which correction process applies to their circumstances.
